In Afghanistan, last decade witnesses fuel prices doubled

KABUL (Pajhwok): Crude oil rates fluctuate in Afghanistan less frequently than in other neighbouring and regional countries, a Ministry of Commerce and Industries official says, indicating price stability.

But statistics collected by Pajhwok Afghan News show the prices of petroleum products have doubled in the last decade.

In an exclusive interview with Pajhwok Afghan News, ministry spokesman Musafar Qoqandi claimed fuel price trends in the country did not change as frequently as in Pakistan, India and Bangladesh.

Qoqandi reasoned: “This price stability is largely linked with Afghanistan’s proximity to Turkmenistan and the fact that the government strictly regulates and controls the rates.”

He estimated annual fluctuations in oil prices in Pakistan at about 10 percent, compared with only six percent in Afghanistan. Three years back, it was 17 percent, the spokesman recalled.

But the yearly rise and fall in fuel rates in European countries ranged between two and three percent, explained the official, who said the variations were mainly seen in the supply-demand context at the start of the new financial year.

During a recent visit to Turkmenistan, the minister of commerce signed an agreement for the import of 37,000 tonnes of crude oil and gas. As part of the deal, the first shipment has already reached the landlocked country.

“The government, particularly the Ministry of Commerce, is trying to ensure a free market system that positively responds to public needs,” the spokesman said.

He claimed that prices of gas and petroleum products had been steady over the past three years, with one kilogram gas accounting for 55 afs and a litre of diesel for 60 afs.

But the smuggling of gas and petroleum product into Pakistan, growing insecurity in Iraq and the dragging electoral crisis in Afghanistan have lately been sending the prices soaring.

Back in 2005, the price of one kilogram gas was 38 afs, but in 2014 the prices of the same quantity surged to 65 afs. The gas prices were seen fluctuating and touché the figure of 120 afs.

In addition, the price of one liter petrol was 25 afs in 2005; it has surged to 46 afs in 2010 while in 2014 it stood at 62 afs per liter. On the other hand, the cost of one liter diesel was 26 afs in 2005 but the price of the same quantity in 2012 reached to 55 afs while in 2014 it touched the figure of 62 afs.

Mohammad Naseer, a resident of Kabul city, said ten days back the price of one kilogram gas was 65 afs, but Thursday it surged up to 75 and 120 afs.

Similarly, the residents of Chalsatoon locality said one kilogram gas was being sold at the rate of 85 afs to 90 afs in the open market.

In Pakistan, one liter petrol is being sold at 110 rupees (62 afs), one liter diesel at 111rupees (63 afs) and one kilogram of gas costs 86 rupees (43 afs). In neighboring Iran, the price of one liter petrol is 1,000 Toman (18 afs), one liter diesel is 500 Toman (9 afs) and one kilogram gas is 450 Toman (8 afs).

In the world largest democracy, India, the price of one liter petrol is being sold at 75 Indian rupees (70 afs), one liter diesel costs 47 rupees (44 afs) and one kilogram gas at 93 rupees (75.50 afs).

Qoqandi hoped that the 34,000 crude oil deal with Turkmenistan would help create an environment of positive competition in the market.

But Samiullah Nasrat, the economic faculty head at the Nangarhar Islamic University, said the prices of petroleum products in the international market had a direct impact on Afghanistan.

He argued Afghanistan being a weak economy and could not be compared with European countries. The expert believed even a small rise in petroleum product prices in Europe could badly affect Afghanistan’s economy.

Other countries keep prices of such products in check, but the situation is different in Afghanistan. The use of foreign currency, political and security situation and the lackadaisical tourism sector were other factors threatening the economy, he pointed out.

He suggested a strict check and balance system and normal diplomatic relations with others counties to keep the prices of petroleum products stable and import inflows steady. In the not-so-distant past, Iran blocked Afghanistan-bound fuel tankers at its border due to a political crisis that caused a jump in prices.

He underlined the need for an effective plan for market control and supervision, saying all transactions be done in afghanis instead of foreign currency. Such a plan would help efforts at keeping prices stable, he argued.